When are the benefits of GDP growth more likely to reach everyone?
Answer and explanation
Correct answer: When income distribution is more equal
GDP growth raises the value of output, but its benefits are not automatically shared equally. When income distribution is more equal, a larger proportion of households can obtain additional goods, services, education, and health care. Thus option C best explains broad-based welfare gains. Rising unemployment, pollution, or declining education would generally weaken the social benefit of growth.
Frequently asked questions
What is the correct answer to this question?
When income distribution is more equal
Why is this the correct answer?
GDP growth raises the value of output, but its benefits are not automatically shared equally. When income distribution is more equal, a larger proportion of households can obtain additional goods, services, education, and health care. Thus option C best explains broad-based welfare gains. Rising unemployment, pollution, or declining education would generally weaken the social benefit of growth.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
